Robin Hanson wrote:
> >Second, as far as hard landings: through most of history there has not
> >been the understanding that we have today of macroeconomics. Yes, there
> >is still much to be learned, and people do not always behave predictably.
> >But at the same time we can't deny the effectiveness of the US Federal
> >Reserve over the last two decades in moderating the business cycle and
> >keeping the economy on a generally even keel.
> I think many people do deny this. I'm not sure I share your confidence.
> >Stock prices may fall and even crash eventually, but we should not expect
> >a 1930s style depression as a result. ... There is still every
> >reason to expect significant, possibly unprecedented, economic growth
> >over the next few decades, based on technology. Ultimately that can
> >support very high valuations.
> But there was also significant unprecedented technology growth
> in the 1930s.
The deflationary spiral in the farm sector in the 20's due to excessive
productivity growth in farm production does mirror the current deflationary
spiral built into Moore's Law with regards to computer technology, however keep
in mind that they didn't have an inkling of a Moore's Law analog for farm
productivity then. Most manufacturers today include Moore's Law in their
calculations for product windows, production costs, etc. Additionally, the
increases in productivity in the rest of the economy due to computerization are
not unforeseen, and do not cause double digit deflation.
Other points: There are no nations that owe war reparation in excess of the
entire world GDP, and most everyone has given up on the idea of printing money
as a path to prosperity...
This archive was generated by hypermail 2b29 : Thu Jul 27 2000 - 14:09:46 MDT